QUIZ

QUIZ
1. It is the practice of helping organizations to improve

their performance, primarily through the analysis of
existing organizational problems and development of
plans for improvement
a. Accounting
b. Management consulting
c. Total quality management
d. Auditing
2. A person who is qualified by education, experience,
technical ability, and temperament to advise or assist
business on a professional basis in identifying, defining,
and solving specific management problems involving the
organization’s planning, direction, control and operation of
the firm
a. Management accountant
b. Certified public accountant
c. Accounting technician
d. Management consultant
3. These are professional services that employ the
practitioner’s technical skills, education, observations,
experience and knowledge of the consulting process
a. professional services
b. Analytical process
c. Technical services
d. Consulting services
4. Management consulting (or management consultancy)
a. Is limited to CPAs
b. Is not limited to CPAs
c. May be practiced by anybody since it is not limited to
CPAs
d. Is regulated by law, such that an individual must pass a
government licensure examination first before he could
practice the same
5. In Advisory Services, the practitioner’s function is to
a. provide counsel in short time frame, based mostly on
existing personal knowledge about the client, the
technical matters involved, the circumstance client
representations and the mutual intent of the parties
b. develop findings, conclusions and recommendation for
client’s consideration and decision making
c. to put an action plan into effect
d. provide services related to a specific client transaction,
generally with a third party
6. MAS areas which are normally related to the
accounting and finance functions may include
a. Establishment of budgetary controls

b. Preparation of organization and administrative manuals
c. Plant layout studies
d. Development of preventive maintenance systems
7. It requires a practitioner to be, among other things,
honest and candid within the constraints of client
confidentiality
a. Integrity
b. Objectivity
c. Maturity
d. Independence in mental attitude
8. A CPA engaged in MS practice may not
a. Disclose confidential information unless authorized or

legally obligated
b. Act as independent auditor of the same client-firm
c. Accept other employment while serving as
management consultant
d. Be independent in mental attitude
9. MAS can be classified according to the practitioner’s
ability and/or expertise. Those services which require
special skills, aptitude, and training which CPAs do not
normally possess are called
a. Usual services
b. Somewhat specialized services
c. Highly specialized services
d. Unusual services
10. In decision-making case, which of the following costs
is generally not relevant to the decision?
a. Avoidable cost
b. Historical cost
c. Opportunity cost
d. Differential cost
11. In a make or buy decision analysis, which of the
following qualitative factors is/are usually considered?
a. Assurance of quality control

b. Skilled labor
c. Special technology
d. All of the above
12. The following characterize management advisory
services, except
a. It involves decision for the future

b. It is broader in scope and varied in nature
c. It utilizes more junior staff than senior members of the
firm
d. It related to specific problems where an expert’s help is
required
13. Given for Owen Company are the following
information:
Regular production and sales per year 60,000 units
Total fixed cost P576,000
Total variable costs P528,000
One-time only special order received 12,000 units
Regular selling price per unit P20
Special selling price per unit P10
What is the incremental cost per unit of the special order?
14-15. Calero Manufacturing Company can make 30,000
units of a product with the following costs:
Direct materials P4
Direct labor 12
VOH 6
FOH 8
The company has the capacity to produce 40,000 units.
The product regularly sells for P40. A wholesaler has
offered to pay P32 a unit for 2,000 units. If the firm
accepts the special order the effect on its operating
income would be a ________.
ANSWERS
1. It is the practice of helping organizations to improve
their performance, primarily through the analysis of
existing organizational problems and development of
plans for improvement
a. Accounting
b. Management consulting
c. Total quality management
d. Auditing
2. A person who is qualified by education, experience,
technical ability, and temperament to advise or assist
business on a professional basis in identifying, defining,
and solving specific management problems involving the
organization’s planning, direction, control and operation of
the firm
a. Management accountant
b. Certified public accountant
c. Accounting technician
d. Management consultant
3. These are professional services that employ the
practitioner’s technical skills, education, observations,
experience and knowledge of the consulting process
a. Professional services
b. Analytical process
c. Technical services
d. Consulting services
4. Management consulting (or management consultancy)
a. Is limited to CPAs
b. Is not limited to CPAs
c. May be practiced by anybody since it is not limited to
CPAs
d. Is regulated by law, such that an individual must pass a
government licensure examination first before he could
practice the same
5. In Advisory Services, the practitioner’s function is to
a. provide counsel in short time frame, based mostly on
existing personal knowledge about the client, the
technical matters involved, the circumstance client
representations and the mutual intent of the parties
b. develop findings, conclusions and recommendation
for client’s consideration and decision making
c. to put an action plan into effect
d. provide services related to a specific client transaction,
generally with a third party
6. MAS areas which are normally related to the
accounting and finance functions may include
a. Establishment of budgetary controls

b. Preparation of organization and administrative manuals
c. Plant layout studies
d. Development of preventive maintenance systems
7. It requires a practitioner to be, among other things,
honest and candid within the constraints of client
confidentiality
a. Integrity
b. Objectivity
c. Maturity
d. Independence in mental attitude
8. A CPA engaged in MS practice may not
a. Disclose confidential information unless authorized

or legally obligated
b. Act as independent auditor of the same client-firm
c. Accept other employment while serving as
management consultant
d. Be independent in mental attitude
9. MAS can be classified according to the practitioner’s
ability and/or expertise. Those services which require
special skills, aptitude, and training which CPAs do not
normally possess are called
a. Usual services
b. Somewhat specialized services
c. Highly specialized services
d. Unusual services
10. In decision-making case, which of the following costs
is generally not relevant to the decision?
a. Avoidable cost
b. Historical cost
c. Opportunity cost
d. Differential cost
11. In a make or buy decision analysis, which of the
following qualitative factors is/are usually considered?
a. Assurance of quality control

b. Skilled labor
c. Special technology
d. All of the above
12. The following characterize management advisory
services, except
a. It involves decision for the future

b. It is broader in scope and varied in nature
c. It utilizes more junior staff than senior members of
the firm
d. It related to specific problems where an expert’s help is
required
13. Given for Owen Company are the following
information:
Regular production and sales per year 60,000 units
Total fixed cost P576,000
Total variable costs P528,000
One-time only special order received 12,000 units
Regular selling price per unit P20
Special selling price per unit P10
What is the incremental cost per unit of the special order?
P8.80
14-15. Calero Manufacturing Company can make 30,000
units of a product with the following costs:
Direct materials P4
Direct labor 12
VOH 6
FOH 8
The company has the capacity to produce 40,000 units.
The product regularly sells for P40. A wholesaler has
offered to pay P32 a unit for 2,000 units. If the firm
accepts the special order the effect on its operating
income would be a 20,000 increase.

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What is management consulting and what does it involve?

What are some of the areas that management advisory services (MAS) can help with?

QUIZ

1. It is the practice of helping organizations to improve

a. Establishment of budgetary controls

a. Disclose confidential information unless authorized or

a. Assurance of quality control

a. It involves decision for the future

a. Establishment of budgetary controls

a. Disclose confidential information unless authorized

a. Assurance of quality control

a. It involves decision for the future

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